All you need to know about a lease

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Rudolphe ABEN

All you need to know about a lease

Protect yourself from tenant mistreatment with the help of a rental agreement or lease contract. In the event of a dispute, this will undoubtedly be the most important document under scrutiny.

As such, it is wise to favor a bespoke contract, drafted according to the criteria of your rental, in order to anticipate all situations and better protect yourself. Learn the most crucial factors to consider before signing a lease.

Breaking down the Money Details

Settling on a rent amount, tenant fees, and security deposits are all matters that must be dealt with in accordance with the law enacted in Luxembourg in 2006. Article 3 of the lease may outline guidelines for determining the rent, but in practice, the amount is typically determined through negotiation between the parties and/or market conditions. A legal framework is only applied if and when a dispute arises during the lease term.

“Any legal dispute that may arise during the lease's execution shall be resolved in accordance with the law and only the law”.

It is common practice to include prepayments for utilities such as electricity, gas, and heating in the "charges" section you provide to your tenant. A tenant can only be made responsible for utilities, routine apartment and common area maintenance, and minor repairs if written into the lease agreement. You have to pay for things like a trustee or expensive repairs.

Also, be sure to include the security deposit amount in your lease agreement. This is a preliminary payment in case the property sustains any damage after the tenant vacates. No more than three months' worth of rent should be included in this sum.

“The security deposit amount must be stated.”

Duration, subletting, and inventory of furnishings are all necessary formalities

Your lease should include more than just the financial details. In principle, when a lease is signed, it is for an indefinite period of time. Although an end date may be specified, the contract may be extended by mutual agreement of the parties in accordance with the provisions of the Civil Code, which states that a lease with a specified end date automatically converts to an open-ended lease on the date the lease's term expires, regardless of the lease's original terms. Contrarily, the notice period and other termination terms should be spelled out in the contract (usually 3 months).

Keep in mind that you can include a clause in the lease prohibiting subletting if you so choose. Keep in mind that if your tenant signs a sublease, you have no say in the terms of the agreement he makes with his subtenant. If you're more comfortable maintaining total command, you should probably forbid this.

Make sure to take stock of all of your furniture and other belongings before you sign the lease and officially relocate. Doing so will help you differentiate between pre-existing damage and any damage that may have been caused by the tenant after you moved in.

Instructions for the upkeep of the garden, garage, ancillary rooms, etc., can be included in the lease as needed. If you want to make sure your contract accurately reflects the property and covers every eventuality, it's best to have a real estate professional draft it rather than using a template you found online.